The federal government should just purchase $25 billion worth of vehicles from the auto companies, then distribute them according to population via state lottery departments, which can then award them as prizes. Should be great for voluntary tax revenue!
Imagine the excitement each week, and imagine the bonanza for the traditional media during a time of lackluster ad sales. The possibilities are endless. A car an hour! Seven cars at once! Bowling for cars! You get the idea.
All this bridge loan stuff sounds pretty fishy to me anyhow. I don’t even know what it means. Most likely it means “you will never see this money again, taxpayers, making it a “bridge loan to nowhere.” Might as well make sure some lucky citizens get a new vehicle out of the deal.
Okay, small problem: there are a handful of states that have no lottery. According to this Wikipedia entry they are Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming. Maybe some of them could be persuaded to quickly enact a temporary car lottery or something. I’m sure Nevada could dream something up. Utah, well, you know.
Jon–
I don’t think buying $25 BILLION of cars will solve the huge problem they have created….but it’s a clever thought.
Actually Jon, car companies have been overproducing for years.
Toyota pays it’s workers nearly $40/hour.
They have survived because they are a better run and more productive company that has met the consumers needs.
Let the Big 3 tank.
Tell the workers to move where the jobs are.
Things will work out over time….the market will work things out here.
NO MORE BAILOUTS!
Bridge Loans, knowing there is a high probability of failure, are merely Bailouts with a more palpable name. Right?
Jon
I do not know if you are serious but, IMHO, any money spent just making jobs is a waste. We need to use the Palme model from Sweden and create the government as a sort of social investor. This means replacing the effin hedge funds and leveraged banks with something more like the Japanese system where the major osurce of capital has as its interest the nation.
In re the auto industry, it seems ot me the best way to do this is to avoid anything that results only in short term jobs. We may, as Paul Krugman has said, need to do something of the sort to tide them over but whatever we do should open up a longer term national investment strategy that restructures Detroit to be a better competitor with the likes of other nationalist companies like VW or Toyota.
There are a lot of ways this might be done, none of which mean direct government management but all of which out the US a the table so the new board operates with the long term perspective hedge funds and typical american investors have lacked.
As one example, isn’t it obvious that the energy situation demands we desurbubanize the USA? This should mean the creation of public transit systems that are adapted to unique American geographic and social patterns. One way of infusing capital into GM/Ford/Chrysler would be to fund them to develop ideal vehicles, using the government investment the way Europe has invested in Airbus to create a world product.
Senator Carl Levin (D) said today “The Auto industry did no wrong, it’s was high oil and the financial crash which caused this problem.”
He then went on to say” We need a plan from the industry on how they plan on fixing their problems.”
Jon–
Microsoft—$17.70
Boeing—$37
Starbucks—7.30
No money for lottery tickets.
Promoting “gambling” during a recession will lead to more alcholism, drug abuse, spousal abuse etc.
Gambling is not the answer now…or ever really.
@3
Pelosi said any talk about bankruptcy is unacceptable, until they take politics out of this mess nothing will be accomplished for what is best for us taxpayers where is this CHANGE?
They need to start at the top of the auto industry and work down to the union and janitor.
The Dems will not touch the union contracts which isn’t the whole problem but a lot of it.
A bridge loan is just a loan; albeit short term.
@6
A bridge loan to nowhere.
For once, I think I might actually agree with Cyn. Detrot is so riddled with corporate stupidity and greed that it needs to die a natural death. Just let them die. As I’ve said before, Ford and GM will likely survive, albeit as importers, but Chrysler will go the way of the dinosaur.
Don’t feel bad for the unemployed workers, though. I would feel pretty safe that once the Dead Three start selling off their assets to repay their creditors, the plants themselves could be purchased by some of the rising giants of China and India (though I’ll bet Daimler-Benz gets first dibs on Chrysler). The workers may not make what they used to when they were unionized (sorry, but the UAW is as guilty as anyone else in this, and they’ll eventually be pushed aside and fade into history), but they’ll be back making cars within a few years.
But it’ll be pretty odd seeing a new Big Three in Detroit, comprised of Mercedes-Benz, Tata (India) and Geely (China)……
“The workers may not make what they used to when they were unionized”
Please refer to Cyn’s (for once, right on) post at the top of this thread.
It’s OK to pay workers handsomely so long as you’re not paying them to make junk.
Maybe they can plant a nice cherry orchard or something where the city of Detroit used to be.
I never said that what autoworkers made was wrong. But new owners in Detroit won’t be paying $40/hour for anything. Regardless, the UAW is pretty much going to be a non-factor in the future of the American auto industry. Pardon me for having a bit of antipathy for fat-cat unions (earned because of AFSCME screwing my wife over when they wouldn’t help her when she got sick – thus forcing her to retire) that are just as clueless to the realities facing them as their corporate sparring partners, but UAW are just as culpable for the death of the American auto industry as the Dead Three are. Therefore, they deserve their descent into obsolescence.
This is genius. Please make sure they buy the Volt, though. Or maybe Congress could buy mass transit vehicles (buses) from GM.
I like that idea!
SeattleJew suggests transit. Perhaps the lottery prize should be a bus route serving the winner’s neighborhood, one round trip per weekday, for 12 months. This could be an addition to an esisting bus route (e.g, extend it longer into the evening). There could be a few restricions on the choice of route, such as not turning into a cul-de-sac.
If the winner drives himself everywhere, the prize might be used for a neighborhood children’s trips to school.
If lottery players represent the population, then winners will tend to live in denser neighborhoods, where the buses can get more usage. After the first year’s experience, the community can decide whether to keep the route, modify it, or eliminate it.